Eve Sleep plc: Results of new CEO business review, trading update and planned fundraising (746157)

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 Eve Sleep plc (EVE) 
Eve Sleep plc: Results of new CEO business review, trading update and 
planned fundraising 
 
15-Nov-2018 / 07:00 GMT/BST 
Dissemination of a Regulatory Announcement that contains inside information 
according to REGULATION (EU) No 596/2014 (MAR), transmitted by EQS Group. 
The issuer is solely responsible for the content of this announcement. 
 
THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF THE MARKET 
ABUSE REGULATION (EU) NO. 596/2014. 
 
      eve Sleep plc 
 
      ("eve", "Company" or the "Group") 
 
 Results of new CEO business review, trading update and planned fundraising 
 
   eve Sleep plc, the European sleep brand, provides the following update as 
        part of a refocused strategy to drive long term, sustainable growth. 
 
             Business review 
 
 Following his appointment as Chief Executive Officer of the Company from 10 
  September 2018, James Sturrock has, with the Board, carried out a detailed 
    review of the business. The updated strategy refocuses on the core sleep 
   markets of the UK and Ireland ("UK&I") and France, which collectively are 
 worth some GBP6bn per annum. The review concentrated on the transformation of 
            eve into an ecommerce business model that builds a deeper repeat 
    relationship with customers through a broader product range and stronger 
   customer experience in order to drive a healthy customer life time value. 
             The strategy will focus on the three core pillars of: 
 
  · Differentiated brand positioning; 
 
  · Expanded product range; and 
 
  · Lower friction customer experience. 
 
The eve brand remains strong, awareness continues to grow and eve is now the 
        fifth most well-known mattress brand in the UK. The Company plans to 
  continue to build the brand in its chosen markets. An important element of 
  this is the appointment of a new Chief Marketing Officer, who joins at the 
   end of the year. This appointment will be targeted at building a strategy 
  that optimises marketing effectiveness. This will be achieved with a lower 
  investment level, concentrating on partnerships, PR and digital marketing, 
 as well as building repeat orders, whilst continuing to build awareness and 
             competitive differentiation. 
 
     To date the broadening of the product range has proved successful, with 
  sales of non-mattress products reaching 17% of total Group revenues in the 
 first six months of 2018. The plan is to more than double the product range 
  in 2019, which will drive further opportunities to cross sell and increase 
     the proportion of repeat orders. The enhanced range is also expected to 
             reinforce the marketing initiatives to drive traffic growth. 
 
      On top of this marketing optimisation, there are also opportunities to 
    improve website conversion rate. Work is already underway to enhance the 
search, discovery and checkout processes on the website and improve delivery 
             options. 
 
             Trading update 
 
With 6 weeks of trading remaining for the current financial year the Company 
 now anticipates it will deliver revenues in line or above revised full year 
    expectations, helped by the early success of the Dreams partnership, and 
        early signs of conversion improvements from projects realised in Q4. 
 
   As part of the business review the Company has also re-evaluated its 2019 
   financial year expectations based on the new strategy. 2019 will shift to 
      building capabilities in customer experience and product range, whilst 
     optimising marketing investment. As such, whilst this work is underway, 
        underlying revenues in the Group are now anticipated to finish below 
    existing guidance, albeit with growth still expected to be strong in the 
             context of the market. 
 
             Planned Fundraising 
 
  To enable the Company to implement these plans, on top of the circa GBP7m of 
           existing net cash as at 31 October 2018, the Board plans to raise 
   approximately GBP15m of new equity to fund the Company's refocused strategy 
     through to profitability. This investment will allow increased focus on 
         website customer experience, enhancing the delivery proposition and 
       significantly developing the Company's product range. The Company has 
  already received material levels of support for the planned fundraise from 
  certain existing shareholders at a price that is significantly higher than 
             the prevailing share price. 
 
   The planned fundraise is expected to be launched prior to the end of 2018 
             and a further announcement will be made in due course. 
 
             Commenting, James Sturrock, CEO of eve Sleep, said: 
 
"The business review has reaffirmed my initial confidence in the size of the 
    opportunity in the sleep market and eve's ability to realise it. It will 
             however require further investment than originally expected. 
 
  "Our planned strategic investments will drive growth through expanding and 
 developing our highly complementary product range and enhancing the overall 
        customer experience and proposition, which will all serve to further 
             strengthen our differentiated brand positioning. 
 
"While we have revised our short term growth ambitions during this period of 
consolidation and investment, we anticipate a marked improvement moving into 
    2020 and beyond. eve has an exciting future ahead and we look forward to 
 putting the business on a stronger footing and establishing eve as Europe's 
             leading sleep and well-being brand." 
 
                             Enquiries: 
 
                          eve Sleep plc via Instinctif Partners 
 
James Sturrock, Chief Executive Officer 
 
   Abid Ismail, Chief Financial Officer 
 
       Peel Hunt LLP (NOMAD and broker)    [phone] 
 
                            Dan Webster 
 
                          George Sellar 
 
                          Guy Pengelley 
 
                    Instinctif Partners [phone] 
 
                        Guy Scarborough 
 
The person arranging release of this announcement on behalf of the Company 
is Abid Ismail, Chief Financial Officer. 
 
ISIN:           GB00BYWMFT51 
Category Code:  TST 
TIDM:           EVE 
LEI Code:       2138007BAC29AUXWQE6 
OAM Categories: 3.1. Additional regulated information required to be 
                disclosed under the laws of a Member State 
Sequence No.:   6549 
EQS News ID:    746157 
 
End of Announcement EQS News Service 
 
 

(END) Dow Jones Newswires

November 15, 2018 02:02 ET (07:02 GMT)